After winning the general election in December 2008, the present Grand Alliance government (led by the Bangladesh Awami League) planned to boost electricity generation to promote rapid economic development. To ensure unquestioned construction of power plants the Government of Bangladesh (GOB) endorsed the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010 which has given immunity to all projects related to energy and power. This denies citizens the right to approach the courts for relief in case of injustice and destruction committed by power plants. The GOB also undertook a Policy guideline called Policy Guidelines for Enhancement of Private Participation in the Power Sector 2008. Under the policy, administrative control has been deregulated to attract the private sector to invest in the energy sector.
Later, the GOB also formulated a Power System Master Plan (PSMP) in 20103 and Power & Energy Sector Master Plan (PESMP) in 2016 under direct assistance from Japan International Cooperation Agency (JICA) with a goal of fulfilling 61% of total energy from fossil fuel including 35% from coal by 2041. By endorsing this Master Plan, the GOB violates its own pledge in the CVF Marrakech Communique which is committed to shifting to renewables as fast as possible. It is also contrary to the country's Nationally Determined Contributions (NDC) which pledges to reduce 5% of estimated emission voluntarily and additional 15% emission under assistance from developed countries by 2030.
After policy reformation on the energy sector, a number of new bilateral investors like China, Germany, India, Japan, Korea, Malaysia, Singapore, and Spain started implementing a number of energy projects besides the traditional and new multilateral financial institutes including World Bank, Islamic Development Bank (IsDB), Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB). Till September 2018, AIIB has invested USD 285 million in three projects in the energy sector including Bhola Integrated Power Plant (Bhola IPP) Project.
Bhola is the only island district of Bangladesh under the administrative division of Barisal. Historically it has experienced a shortage of electricity due to grid connection difficulties. After getting natural gas from Shahbazpur gas field, the GOB permitted Venture Energy Resources Limited, a local company to install a 34.7 MW gas-based power plant. The second power plant, 225 MW gas-based Bhola Gas-based Power Plant (also called Bhola-I) in Kutba Union under Burhanuddin Upazila, had been constructed in 2015 and started generating power in the same year. Bangladesh Power Development Board (BPDB) also planned to construct another 225 MW gas-based power plant along with 4 others, as per the public declaration of the commerce minister.
Simultaneously BPDB had signed another agreement in September 2012 with Indian company Lanco PowerInternational Private Limited to construct a gas-based power plant beside Bhola-I on Build, Operate and Own (BOO) basis10. Later, the agreement was canceled and a new agreement was signed in July 2015 with Shapoorji Pallonji Infrastructure Capital Company Private Limited (SP Infra), a subsidiary of Mumbai-based Shapoorji-Pallonji Group (SP Group) to construct an Independent Power Plant (IPP) in the same area11&12. It was an unsolicited agreement as it was signed without any open bidding process. Initially, SP Group planned to transfer a half-done power plant from Uttarakhand, India to Bhola, Bangladesh but later it changed the decision as BPDB raised several questions on the quality of existing power plants and the process of transferring.
According to the agreement, the power plant project will be fully funded by SP Group15. After getting clearance from the GOB, the Group registered a new company named Nutan Bidyut Bangladesh Limited (NBBL) on 27 March 2016 to operate the energy business in Bangladesh16. Later it is revealed in January 2018 that SP Group submitted a proposal to AIIB for private sector financing in implementation of Bhola IPP17. AIIB approved the project on 9 February 201818. Later, in June 2018, NBBL signed separate agreement with IsDB to finance another USD 60 million for the project19. The power plant will use pipelined natural gas from Shahbazpur Gas field owned by Sundarban Gas Company Ltd. (SGCL) as primary fuel and High-Speed Diesel (HSD) from Bangladesh Petroleum Corporation (BPC) as a backup fuel to generate 225 MW power20. But according to different reports, NBBL will use both of the fuels to generate 220 MW and 212 MW power respectively21. The NBBL signed an agreement with BPDB to sell generated electricity to Power Grid Company of Bangladesh (PGCB) for next 22 years against a price higher than the state owned companies22. The plant acquired 17.28 acres of land for the project in which 11.5 acres leased from BPDB and 5.78 acres have been purchased from local landowners. The other 5.5 acres of land is required for gas pipeline and acquired by SGCL23.
The power plant will be likely to increase total power generation of the country, but the question is who will sacrifice their lives and livelihoods for electricity? The common people who depend on nature and natural resources to survive, or the big companies who make a profit from different investments? The question takes us to the issues of climate change as Bhola is one of the most vulnerable climate hotspots in the world which has experienced several devastating cyclones and storm surges including the commonly known ‘great Bhola cyclone’ which in 1970 took at least 500,0000 lives from this small island.
Read the full report here.